Is this theft?

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    Is this theft?

    Hi all,
    I previously posted on this topic but recently one of my colleagues gave me a different perspective so wanted to reaffirm the advice that I received from the forum.

    Background:
    1. New landlord; property in outer London
    2. Contracted an agent to find a tenant last year
    3. Prospective tenant was found and holding deposit taken (in May 2019 - exact dates are unknown as the agent is refusing to tell me)
    4. Tenancy agreement was not signed as the tenants were found to have given false information (and they were trying to sublet my property through social media even before the tenancy agreement was signed)
    5. I rejected the tenants
    6. Holding deposit (~500) was never returned to the tenants; the agent admitted not returning to the tenants but is refusing to disclose the amount, date received and of course no money has been returned to me.
    7. I understand that holding deposit is generally taken to cover the administrative expenses of the agent, however, here the amount received far exceeds that and the property was taken off the market for the wrong tenant which caused me financial loss. I also I find that the agent's action, having been appointed by me and the fact that the money was obtained to secure my property, to be fraudulent - is this against the law of agency (making secret profit without the knowledge of the principal and thereby breaching their fiduciary duty to me)?

    8. I have, of course, subsequently sacked the agent.

    Can this be reported to the police as theft?

    Thanks in advance,
    BW

    #2
    I don't think the police are bothered about shoplifting. They'll be even less concerned about your problem.

    Comment


      #3
      Thanks JK0; I’m not necessarily concerned about how the police will handle it but wanted a consensus/opinion on whether this is theft or not.
      Thanks

      Comment


        #4
        Who is accusing whom of theft?

        Comment


          #5
          My own completely uninformed guess is that the tenant might have a case against the agent (particularly if the deposit had been taken after 1st June 2019, less so prior to that date), but the OP does not (since it was the tenants money). But this is just uninformed speculation on my part TBH.

          Comment


            #6
            Nukecad, I’m accusing the agent of theft of the holding deposit

            Comment


              #7
              I believe the money is your, not the agents, as it is for taking the property off the market.

              I believe it is breach of law of agency, but I do not know about theft. Possibly fraud.

              Comment


                #8
                Thanks MdeB,
                where do I find the law of agency- it’s not on legislation.gov
                do you think police will be interested in investigating fraud? Thanks

                Comment


                  #9
                  This is what is defined by the Fraud Act 2006: 3. Fraud by failing to disclose information

                  A person is in breach of this section if he—

                  (a)dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and

                  (b)intends, by failing to disclose the information—

                  (i)to make a gain for himself or another, or

                  (ii)to cause loss to another or to expose another to a risk of loss.


                  Fraud by abuse of position


                  (1)A person is in breach of this section if he—

                  (a)occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,

                  (b)dishonestly abuses that position, and

                  (c)intends, by means of the abuse of that position—

                  (i)to make a gain for himself or another, or

                  (ii)to cause loss to another or to expose another to a risk of loss.

                  (2)A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.

                  Comment


                    #10
                    Originally posted by Byrdewear View Post
                    Nukecad, I’m accusing the agent of theft of the holding deposit
                    I'd say that it's not theft, it may be fraud depending on what the prospective tenant agreed to.

                    But that is between the agent and the tenant, you are not realy involved. (Unless the prospective tenant is chasing you).

                    A 'holding' deposit is not to cover the agents admin costs, it's a statement of intent that the prospective tenant is serious about renting the property.
                    (ie. We'll put this up to show we are serious if you agree to stop advertising the property).
                    If and when it's repayable to the tenant depends on just what was agreed at the time, giving false information may well have been a clause that voided return.

                    A holding deposit is nothing to do with a tenancy - there is no tenancy at that time.

                    I don't see how this has caused you a financial loss.
                    OK you haven't been getting any rent for the property, that's just a normal tenancy void, it hasn't cost you anything above what would have happened if this prospective tenant never existed.

                    Comment


                      #11
                      Hi Nukecad, with regards to your last sentence, it did cost me financially - we took the property off the market for more than four weeks for these tenants. Just before they moved in (prior to signing the agreement), I found out about the intention to sublet (by seeing my home being advertised on FB) so rejected the tenants. Basically, I was told by the agent that two related couples were intending to rent the property, when I found out about the sublet, the tenants apparently told the agent that the second couple (their in-laws) pulled out so they had to find replacement tenants. I believe the agents were colluding with them to find replacement too but I cannot prove it.

                      On the whole, of course I financially suffered by the property being taken off the market for more than four weeks for a tenant who gave us misleading/false information. The holding deposit (~500) will far more excessive than what it would have cost the agent for administrative tasks such as referencing. So why retain the whole lot? Also, have they acted legally to withhold information about the amount and the date of receipt?
                      Thanks,

                      Comment


                        #12
                        Nukecad - regarding your first sentence, I don't see how this can be fraud against the prospective tenant - in fact, the tenants committed fraud by advertising my property for subletting.
                        I was the innocent one dealing with the two fraudsters

                        Comment


                          #13
                          You should be aware that if they do give you the deposit they would probably follow it with a bill for the work on the aborted tenancy.

                          Comment


                            #14
                            Sorry but no court in the land would see that as a loss to you.

                            So you took the property off the market for 4 weeks, there's nothing to say that it wouldn't have stood empty for those four weeks anyway.

                            You have not lost anything, you just haven't gained any potential rent.

                            What the prospective tenants intended with regards to sub letting or not is not relevant.

                            You seem to be miffed that the agency took/kept the holding deposit (rightly or wrongly) and didn't pass it on to you.
                            That's nothing to do with the tenant.

                            Comment


                              #15
                              DPT57- I did look at the relevant relevant clause on the TPO Code for this- they can only deduct expenses related to referencing; nothing more than that

                              NukeCad- of course I’m miffed that they didn’t pass it onto me nor did they even tell me how much it was- isn’t this against the law of Agency where the agent is making secret profit without the knowledge of the principal? Also, I don’t see how think it’s not related to the tenant- holding deposit belongs to the tenant and I, as the landlord, am ultimately responsible for agent’s action in how this was handled.

                              Comment

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